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Prosecutors in Trump Organization tax fraud trial claim Trump knew ‘exactly what was going on’


(NEW YORK) — Former President Donald Trump “knew exactly what was going on with his top executives,” a prosecutor claimed Thursday during closing statements in the criminal tax fraud trial of Trump’s namesake real estate company.

Two entities of the Trump Organization — the Trump Corporation and the Trump Payroll Corporation — are on trial for paying the personal expenses of some executives without reporting them as income and for compensating them as independent contractors instead of full-time employees.

Prosecutor Josh Steinglass’ assertion about the former president prompted defense attorney Alan Futerfas to raise a concern outside the jury’s presence, saying jurors had been told from the outset that the criminal trial did not involve Trump personally.

But Steinglass said defense attorneys Susan Necheles and Michael van der Veen had “opened the door” by saying during their closing statements that Trump did not know about the tax fraud his company allegedly committed.

“You have heard no evidence in this case that Mr. Trump or any of his children were aware of anything improper,” van der Veen said during his closing argument.

Judge Juan Merchan sided with Steinglass, saying, “I took note of the efforts both Ms. Necheles and Mr. van der Veen went to distance Mr. Trump from the case” — and that it was only fair to allow prosecutors to argue otherwise.

Steinglass, meanwhile, pushed back on the defense narrative that former Trump Organization CFO Allen Weisselberg had only his own self-interests in mind when he hatched a scheme to evade taxes by having the company pay millions in personal expenses that he failed to declare on his income taxes. Steinglass conceded Weisselberg was “primarily motivated by his own greed” — but he insisted “there is a tremendous amount of evidence here, completely ignored by the defense in their summations, that he intended to benefit the defendants.”

Prosecutors believe the Trump Organization is culpable because Weisselberg’s conduct benefitted the company and because his position as CFO means he was entrusted to act on the company’s behalf.

The prosecutor urged the jury to focus on a single question: “Are the corporations liable for the conduct of its employees?”

Both the off-the-books perks and the independent contractor payments ended once Trump became president, said Steinglass.

They cleaned it up because “they were worried about getting caught,” Steinglass said.

Earlier Thursday, Necheles’ closing statement pinned the scheme solely on Weisselberg, who pleaded guilty in August to a 15-count indictment, and said the company is not liable for his criminal conduct.

“The prosecution’s case rests on one thing: trying to convince you, the jurors, that Mr. Weisselberg’s actions were done in behalf of the company,” Necheles said. “They were not. They were done solely to benefit himself. And that is the critical issue in this case.”

Weisselberg testified at trial that he reduced his reported salary by the total amount of the personal expenses that the company covered, and that the company benefitted by paying less in payroll taxes. He also testified that his primary motive was greed.

The longtime CFO, who agreed to testify as part of a plea deal with prosecutors, said his primary goal in arranging the perks was to “save pretax dollars.”

Weisselberg “testified that Allen Weisselberg committed these crimes solely to benefit himself — solely to benefit himself,” Necheles said. “In other words, no intent to benefit the corporation.”

“This case is about greed. But only the greed of Allen Weisselberg,” said van der Veen, who represents the Trump Payroll Corporation. “There’s not any dispute about what Allen Weisselberg did. The real question is, ‘Who did he do it in behalf of?"”

Van der Veen suggested that the real crime was not the company’s decision to pay Weisselberg’s rent, the lease on his Mercedes Benz, or his grandchildren’s school tuition — but Weisselberg’s failure to report those perks on his income taxes. The attorney questioned why the Manhattan district attorney’s office charged the company.

“They wanted something with the Trumps attached to it,” van der Veen said, drawing an objection from prosecutor Josh Steinglass that the judge overruled.

The defense also tried to convince the jury the Trump Organization’s outside accountant, Donald Bender of Mazars USA, should be blamed for failing to flag the company to fraud or other criminal conduct.

“Bender never told the owner of the Trump Corporation, President Trump, that there was anything wrong,” defense attorney Susan Necheles said. “There can be no claim that President Trump had any knowledge or belief that the fringe benefits were illegal.”

But Steinglass pushed back on the idea that Mazars was to blame for failing to flag criminal conduct, accusing the company of “deliberately concealing their wrongdoing from the accountants and then scapegoating the accountants for not sniffing out their malfeasance.”

“If you want to keep committing tax fraud you don’t ask your accountant for his blessing,” Steinglass said.

As part of its closing statement, the defense prepared a scorecard for the jury that listed elements of the scheme and boxes to check “yes” or “no” regarding whether there was an intent to benefit the Trump Organization. Necheles paired it with transcripts of select testimony in which witnesses said the sole beneficiary was Weisselberg.

But some of the transcript pages displayed for the jury included answers to questions that had been successfully objected to, which caused a delay while the pages were reviewed and prosecutors sought corrections.

“It’s your responsibility to make sure this doesn’t happen again,” Judge Juan Merchan told the defense. “I don’t fault the People for being upset.”

The outcome of the case could turn on the vagaries and nuances of a part of New York criminal law that even the judge has called “confusing.” Judge Merchan said Wednesday he would allow defense attorneys to argue in their closing statements that prosecutors failed to show Weisselberg acted “in behalf of” the company.

The confusing part, the judge said, is that the New York state legislators who drafted the relevant statute did not define exactly what “in behalf of” means in that context.

The judge said he would not allow the defense to “overstate what that intent was.”

If convicted, the company faces fines of up to $1.7 million. Potentially more significant could be collateral consequences if banks call in loans or partners cancel contracts.

The trial also revealed that Trump reported nearly $1 billion in operating losses over a two-year period about a decade ago, spilling into public view tax information that the former president had tried repeatedly to keep private.

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